About the Scheme
On 1 July 2011 a new portable long service leave scheme for the contract cleaning industry commenced. The scheme is administered by the Long Service Corporation (LSC) and is funded by a levy on industry employers. The levy is calculated on a percentage of the ordinary wages of employees to be set by Regulation and is payable to the Corporation on a quarterly basis.
Background to the introduction of the scheme.
It is not unusual for workers in the contract cleaning industry to clock up a few years service with an employer only to have their long service leave reset to zero, following the expiration of the contract, even if they are rehired by the new contract holder. They effectively forfeit the time already served despite working in the industry for 10 years or even longer.
For a number of years, peak industry organisations including the Building Service Contractors’ Association of Australia (BSCAA), the Australian Cleaning Contractor’s Association (ACCA) and United Voice (formerly the Liquor Hospitality and Miscellaneous Workers Union), lobbied the state government to introduce a portable long service leave scheme for workers in the industry. The legislation to create the scheme received bipartisan support and became law in December 2010. The scheme commenced on 1 July 2011 and rewards workers after 10 years service in the industry rather than to one employer.
Who does the scheme cover?
Fulltime, part-time and casual cleaners employed by a business or self employed as a contractor to undertake commercial, or domestic cleaning work under contract such as in offices, shopping centres, schools and hospitals.
Contracts may be verbal or written.
Not all cleaners are covered by the scheme. For example, cleaners directly employed by an office, shopping centre, school or hospital to perform cleaning duties are not covered.
Example:
Ruth and Juan both perform cleaning work but only one of them is eligible to register in the scheme:
Ruth is employed directly by the owner of a factory to clean the factory premises. Ruth is not covered by the scheme because she is not employed by a contract cleaning industry employer.
Juan is employed by a business that is contracted to provide cleaning services to the owner of a retail business. Juan is covered by the scheme because he is employed by a commercial cleaning contractor.
What are the benefits of the scheme?
Contract cleaning workers in New South Wales will be entitled to long service leave after completing 3650 days of service (10 years) with one or more employers in the industry. The long service leave entitlement after ten years is 8.67 weeks paid at ordinary wages (not including overtime).
A pro rata entitlement to payment instead of leave will be available after 5 years recognised service in certain circumstances. The scheme benefits are equal to the leave entitlements provided by the NSW Long Service Leave Act 1955.
A bonus service credit of 365 days (1 year) will be given to all workers who are registered in the scheme by 31 December 2011. These workers will be recognised as ‘Foundation Workers’.
Relationship with the NSW Long Service Leave Act 1955
Provisions are made that clarify the nexus between the operation of the scheme and existing benefits under the general NSW Long Service Leave Act 1955.
Example:
A contract cleaner who has nine (9) years service with a single employer and continues to be employed by them for 12 months following the commencement of the scheme will apply for long service leave in the usual manner.
In this scenario a split liability will apply. The employer remains directly responsible for the initial nine (9) years service and the scheme is liable for the payment in relation to the service accrued after 1 July 2011.
In practical terms the employer would pay the worker the full amount in the first instance and apply to the Corporation for reimbursement for levies paid on a pro rata basis.